Hurricane Katrina affected millions and continues to affect them through the displacement, recovery and rebuilding that is taking place in New Orleans and around the country. Businesses that hire a worker displaced by Hurricane Katrina can benefit from Hurricane Katrina Emergency Relief Act signed on September 23, 2005. Businesses are offered a 40% tax credit on the first $6,000 paid to the hired workers.
Businesses that were affected by Hurricane Katrina also have an extension until February 28, 2006 to file their tax returns and they are allotted full deductions for any losses paid out of pocket. Insurance reimbursements should be reflected on later tax returns.